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Metropolitan Bank Holding Corp. Reports Second Quarter Net Income of $13.3 Million and Diluted EPS of $1.55

  • Total Revenues increased 20.4% from the prior year quarter
  • Tangible book value per share increased 14.7% from the prior year quarter

Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), today reported net income of $13.3 million, or $1.55 per diluted common share, for the second quarter of 2021 compared to net income of $10.8 million, or $1.29 per diluted common share, for the second quarter of 2020.

Financial Highlights include:

  • Total revenues of $43.1 million, up 20.4% from the prior year quarter, and up 26.9% excluding gain on sale of securities1 recorded in each period
  • Second quarter earnings per share of $1.55, up 20.2% from the prior year quarter
  • Book value per share was $42.92 per share, up 14.2% and tangible book value per share1 was $41.75, up 14.7% from prior year quarter
  • Annualized return on average equity of 15.0% and an annualized return on average tangible common equity1 of 15.7%
  • Loans were up 6.5% from the linked quarter and 19.3% from June 30, 2020
  • Deposits were up 19.5% from the linked quarter and 55.8% from June 30, 2020, with non-interest bearing demand deposits increasing by $1.3 billion or 83.0% since June 30, 2020.
  • Efficiency ratio1 improved to 50.3% compared to 51.1% for the prior year quarter

Mark DeFazio, President and Chief Executive Officer, commented, “Our second quarter results, which underscore our sustainable and resilient organic growth, highlight the business model and values we developed 22 years ago when MCB was founded. At its core, MCB is a commercial bank that consistently drives organic loan and deposit growth, which provides sustainable growth in net income, tangible book value per share and EPS. Given our early strategic vision and foresight on industry change, we developed a unique ability to collaborate with fintech clients well before “fintech” was a term. Our Global Payments Group continues to pave the way for the transformation of MCB that allows us to simultaneously be a high performing commercial bank and a critical financial infrastructure partner to fintechs. Our Global Payments Group, with revenue growth and stable, non-interest-bearing deposits, continues to be a meaningful source of liquidity. As our fintech partners continue to gain market share, MCB is well positioned to benefit from this vertical’s low acquisition cost of deposits.

As we approach the end of our fourth year as a public company, I am reminded that our people make the difference. Without the dedication and effort of the entire MCB team, including through the challenges of the pandemic, we would not be able to deliver on our promise to our clients to help them build and sustain generational wealth. A heartfelt thank you goes out to the entire MCB team for all they do to make this a reality,” Mr. DeFazio concluded.

 


1non-GAAP financial measure. See Reconciliation of Non-GAAP measures starting on page 12.

Balance Sheet

The Company had total assets of $5.8 billion at June 30, 2021, an increase of 45.8% from June 30, 2020. Total loans net of deferred fees and unamortized costs increased to $3.5 billion at June 30, 2021, as compared to $2.9 billion at June 30, 2020. The increase in total loans from June 30, 2020 was due primarily to an increase of $225 million in commercial real estate (“CRE”) loans (including construction and multifamily loans) and $335 million in commercial and industrial loans. Loan production was $501 million year to date at June 30, 2021 compared to $330 million year to date at June, 30 2020.

Total cash and cash equivalents were $1,7 billion at June 30, 2021, an increase of 108.9% from June 30, 2020. The increase in cash and cash equivalents reflects the strong growth in deposits. Total securities, primarily those classified as available-for-sale (“AFS”), were $548 million at June 30, 2021, an increase of 181.0% from June 30, 2020 due to the deployment of excess liquidity from deposit growth.

Total deposits increased to $5.3 billion at June 30, 2021, up 55.8% from $3.4 billion at June 30, 2020. The increase in deposits was due to increases of $1.3 billion in non-interest-bearing deposits and $626 million in interest-bearing deposits, resulting from increases across most deposit verticals. Non-interest-bearing deposits were 52.8% of total deposits at June 30, 2021, as compared to 45.0% at June 30, 2020.

The Company and the Bank each meet all the requirements to be considered “Well-Capitalized” under applicable regulatory guidelines. Total non-owner-occupied commercial real estate loans were 442.6% of total risk-based capital at June 30, 2021 compared to 422.0% of total risk based capital at June 30, 2020.

Income Statement

Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2021

 

2020

 

 

2021

 

2020

 

 

Total Revenues

 

$

43,129

 

$

35,814

 

 

$

82,145

 

$

69,121

 

 

Net income

 

 

13,336

 

 

10,811

 

 

 

25,453

 

 

16,908

 

 

Diluted earnings per common share

 

 

1.55

 

 

1.29

 

 

 

2.45

 

 

2.01

 

 

Annualized return on average assets

 

 

0.97

%

 

1.14

%

 

 

1.01

%

 

0.94

%

 

Annualized return on average equity

 

 

14.98

%

 

13.82

%

 

 

14.58

%

 

10.95

%

 

Annualized return on average tangible common equity*

 

 

15.65

%

 

14.36

%

 

 

15.24

%

 

11.54

%

 

Net Interest Income

Net interest income for the second quarter of 2021 was $37.0 million, an increase of $2.6 million from the linked quarter. This increase was primarily due to a higher average balance of $5.5 billion in interest-earning assets for the second quarter of 2021, which increased $816 million from the linked quarter. This increase was partially offset by an increase of $253 million in average interest-bearing liabilities, which were $2.4 billion for the second quarter of 2021, as compared to $2.2 billion for the linked quarter.

Net interest income increased $6.8 million for the second quarter of 2021, as compared to the second quarter of 2020, primarily due to an increase of $1.7 billion in the average balance of interest-earning assets for the second quarter of 2021, as compared to the second quarter of 2020. This was partially offset by a $423 million increase in the average balance of interest-bearing liabilities for the second quarter of 2021, as compared to the second quarter of 2020.

Net Interest Margin

Net interest margin decreased by 32 basis points to 2.68% for the second quarter of 2021, as compared to 3.00% for the linked quarter, primarily due to increased lower yielding overnight deposits driven by deposit growth. Additionally, the average cost of interest-bearing deposits remained at 0.60%.

Net interest margin decreased by 51 basis points to 2.68% for the second quarter of 2021 as compared to 3.19% for the second quarter of 2020, primarily due to increased low yielding overnight deposits driven by deposit growth; partially offset by a decrease in the average cost of interest-bearing liabilities driven by the lower rate environment.

Total cost of funds was 32 basis points, a decrease of 3 basis points from the linked quarter, and a decrease of 16 basis points from the prior year quarter, given the shift in mix toward non-interest bearing deposits.

Non-Interest Income

Non-interest income was $6.2 million for the second quarter of 2021, an increase of $1.6 million from the linked quarter driven primarily by a $0.4 million increase in Global Payments Group revenue, which continues to see strong increases in client transaction volumes driving revenue growth, a $0.6 million increase in recognized gains on sales of AFS securities and an increase of $0.5 million in service charges and fees.

Non-interest income for the second quarter of 2021 increased by $0.5 million, as compared to the second quarter of 2020. The increase was primarily due to an increase of $1.5 million of Global Payments Group revenue, an increase of $0.7 million in service charges and fees, offset by a reduction in recognized gains on sales of AFS securities of $1.7 million.

Non-Interest Expense

Non-interest expense was $21.7 million for the second quarter of 2021, an increase of $1.4 million from the linked quarter. The primary drivers were a $0.7 million increase in professional fees and a $0.5 million increase in technology costs, both of which primarily related to business and volume growth.

Non-interest expense increased $3.4 million for the second quarter of 2021, as compared to the second quarter of 2020. Drivers included an increase in compensation and benefits cost due to additional full-time employees along with annual salary adjustments and increases in professional fees in line with business and volume growth, partially offset by reduced licensing fees given the LIBOR rate reduction.

Asset Quality

Credit quality remains strong with no charge offs in the second quarter of 2021, while non-performing loans fell to 0.2% of total loans. During the second quarter of 2021, the Company recorded a credit provision of $1.9 million primarily driven by loan growth. COVID-19 related full payment deferrals declined to $11.0 million, or 0.3% of the total loan portfolio as of June 30, 2021. Principal only deferrals remained steady at $37.3 million or 1.1% of total loans as of the same date.

About Metropolitan Bank Holding Corp.

Metropolitan Bank Holding Corp. (NYSE: MCB) is the holding company for Metropolitan Commercial Bank. The Bank provides a broad range of business, commercial and personal banking products and services to small and middle-market businesses, public entities and affluent individuals in the New York metropolitan area. Founded in 1999, the Bank is headquartered in New York City and operates six locations in Manhattan, Brooklyn and Great Neck, Long Island. The Bank is also an active issuer of debit cards for third-party debit card programs and provides critical global payments infrastructure to its fintech partners. the Bank is a New York State chartered commercial bank and a Federal Reserve System member bank whose deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”), and an equal opportunity lender. For more information, please visit www.mcbankny.com.

Forward Looking Statement Disclaimer

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include but are not limited to the Company’s financial condition and capital ratios, results of operations and the Company’s outlook and business. Forward-looking statements are not historical facts. Such statements may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “plan,” “continue” or similar terminology. These statements relate to future events or our future financial performance and involve risks and uncertainties that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we caution you not to place undue reliance on these forward-looking statements. Factors which may cause our forward-looking statements to be materially inaccurate include, but are not limited to an unexpected deterioration in our loan or securities portfolios, unexpected increases in our expenses, greater than anticipated growth and our ability to manage our growth, unanticipated regulatory action or changes in regulations, unexpected changes in interest rates, an unanticipated decrease in deposits, an unanticipated loss of key personnel or existing customers, competition from other institutions resulting in unanticipated changes in our loan or deposit rates, unanticipated increases in FDIC costs, changes in regulations, legislation or accounting rules and unanticipated adverse changes in our customers’ economic conditions or general economic conditions, as well as those discussed under the heading “Risk Factors” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and whether the continued reopening of businesses will result in a meaningful increase in economic activity. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen, and higher levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; our cyber security risks may increase if a significant number of our employees are forced to working remotely; and FDIC premiums may increase if the agency experiences additional resolution costs. Forward-looking statements speak only as of the date of this release. We do not undertake any obligation to update or revise any forward-looking statement.

Consolidated Balance Sheet

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

June 30, 2021

 

December 31, 2020

 

June 30, 2020

Assets

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

29,651

 

$

8,692

$

9,529

Overnight deposits

 

 

1,689,614

 

 

855,613

 

813,147

Total cash and cash equivalents

 

 

1,719,265

 

 

864,305

 

822,676

Investment securities available for sale

 

 

543,769

 

 

266,096

 

189,359

Investment securities held to maturity

 

 

2,222

 

 

2,760

 

3,319

Investment securities -- equity investments

 

 

2,291

 

 

2,313

 

2,301

Total securities

 

 

548,282

 

 

271,169

 

194,979

Other investments

 

 

11,989

 

 

11,597

 

15,731

Loans, net of deferred fees and unamortized costs

 

 

3,449,490

 

 

3,137,053

 

2,892,274

Allowance for loan losses

 

 

(37,377)

 

 

(35,407)

 

(32,505)

Net loans

 

 

3,412,113

 

 

3,101,646

 

2,859,769

Receivable from prepaid card programs, net

 

 

43,089

 

 

27,259

 

31,123

Accrued interest receivable

 

 

14,424

 

 

13,249

 

11,148

Premises and equipment, net

 

 

13,337

 

 

13,475

 

15,065

Prepaid expenses and other assets

 

 

14,961

 

 

18,388

 

10,217

Goodwill

 

 

9,733

 

 

9,733

 

9,733

Total assets

 

$

5,787,193

 

$

4,330,821

$

3,970,441

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

2,794,136

 

$

1,726,135

$

1,526,439

Interest-bearing deposits

 

 

2,494,137

 

 

2,103,471

 

1,868,300

Total deposits

 

 

5,288,273

 

 

3,829,606

 

3,394,739

Federal Home Loan Bank of New York advances

 

 

 

 

 

104,000

Trust preferred securities

 

 

20,620

 

 

20,620

 

20,602

Subordinated debt, net of issuance cost

 

 

24,684

 

 

24,657

 

24,629

Secured borrowings

 

 

36,449

 

 

36,964

 

41,948

Accounts payable, accrued expenses and other liabilities

 

 

30,598

 

 

61,645

 

34,780

Accrued interest payable

 

 

1,773

 

 

712

 

1,199

Prepaid third-party debit cardholder balances

 

 

21,201

 

 

15,830

 

31,357

Total liabilities

 

 

5,423,598

 

 

3,990,034

 

3,653,272

 

 

 

 

 

 

 

 

 

Class B preferred stock

 

 

3

 

 

3

 

3

Common stock

 

 

83

 

 

82

 

82

Additional paid in capital

 

 

219,098

 

 

218,899

 

217,644

Retained earnings

 

 

146,283

 

 

120,830

 

98,271

Accumulated other comprehensive gain/(loss), net of tax effect

 

 

(1,872)

 

 

973

 

1,169

Total stockholders’ equity

 

 

363,595

 

 

340,787

 

317,169

Total liabilities and stockholders’ equity

 

$

5,787,193

 

$

4,330,821

$

3,970,441

Consolidated Statement of Income (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

(dollars in thousands)

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

 

Total interest income

 

$

41,050

 

38,106

 

 

$

34,223

 

$

79,156

 

$

70,291

 

Total interest expense

 

 

4,077

 

3,684

 

 

 

4,062

 

 

7,760

 

 

11,159

 

Net interest income

 

 

36,973

 

34,422

 

 

 

30,161

 

 

71,396

 

 

59,132

 

Provision for loan losses

 

 

1,875

 

950

 

 

 

1,766

 

 

2,825

 

 

6,556

 

Net interest income after provision for loan losses

 

 

35,098

 

33,472

 

 

 

28,395

 

 

68,571

 

 

52,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

1,349

 

1,065

 

 

 

803

 

 

2,414

 

 

1,883

 

Global payments revenue

 

 

3,628

 

3,267

 

 

 

2,108

 

 

6,894

 

 

3,729

 

Other service charges and fees

 

 

566

 

304

 

 

 

411

 

 

868

 

 

1,036

 

Unrealized gain (loss) on equity securities

 

 

4

 

(41)

 

 

 

19

 

 

(36)

 

 

55

 

Gain on sale of securities

 

 

609

 

 

 

 

2,312

 

 

609

 

 

3,286

 

Total non-interest income

 

 

6,156

 

4,595

 

 

 

5,653

 

 

10,749

 

 

9,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

11,211

 

11,428

 

 

 

10,058

 

 

22,638

 

 

20,017

 

Bank premises and equipment

 

 

2,000

 

2,024

 

 

 

1,887

 

 

4,024

 

 

4,387

 

Professional fees

 

 

2,003

 

1,304

 

 

 

882

 

 

3,306

 

 

1,837

 

Technology costs

 

 

1,447

 

927

 

 

 

824

 

 

2,374

 

 

1,581

 

Licensing fees

 

 

2,067

 

2,074

 

 

 

2,636

 

 

4,141

 

 

5,684

 

Other expenses

 

 

2,961

 

2,566

 

 

 

1,997

 

 

5,528

 

 

4,291

 

Total non-interest expense

 

 

21,689

 

20,323

 

 

 

18,284

 

 

42,011

 

 

37,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before income tax expense

 

 

19,565

 

17,744

 

 

 

15,764

 

 

37,309

 

 

24,768

 

Income tax expense

 

 

6,229

 

5,627

 

 

 

4,953

 

 

11,856

 

 

7,860

 

Net income

 

$

13,336

 

12,117

 

 

$

10,811

 

$

25,453

 

$

16,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding - basic

 

 

8,312,234

 

8,276,174

 

 

 

8,221,748

 

 

8,294,404

 

 

8,218,853

 

Average common shares outstanding - diluted

 

 

8,543,474

 

8,417,319

 

 

 

8,359,450

 

 

8,479,562

 

 

8,391,514

 

Basic earnings

 

$

1.59

 

1.46

 

 

$

1.30

 

$

2.50

 

$

2.04

 

Diluted earnings

 

$

1.55

 

1.43

 

 

$

1.28

 

$

2.45

 

$

2.00

 

Net Interest Margin Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30, 2021

 

March 31, 2021

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

 

Yield/Rate

 

 

Outstanding

 

 

 

 

Yield/Rate

 

(dollars in thousands)

Balance

 

Interest

 

(annualized)

 

 

Balance

 

Interest

 

(annualized)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

$

3,334,762

 

$

39,234

 

4.65

%

 

$

3,187,450

 

$

36,840

 

4.67

%

Available-for-sale securities

 

487,147

 

 

1,204

 

0.98

%

 

 

330,451

 

 

752

 

0.91

%

Held-to-maturity securities

 

2,348

 

 

9

 

1.52

%

 

 

2,623

 

 

11

 

1.71

%

Equity investments - non-trading

 

2,309

 

 

7

 

1.20

%

 

 

2,302

 

 

8

 

1.39

%

Overnight deposits

 

1,612,187

 

 

442

 

0.11

%

 

 

1,100,690

 

 

344

 

0.13

%

Other interest-earning assets

 

11,985

 

 

154

 

5.15

%

 

 

11,610

 

 

151

 

5.27

%

Total interest-earning assets

 

5,450,738

 

 

41,050

 

2.98

%

 

 

4,635,126

 

 

38,106

 

3.32

%

Non-interest-earning assets

 

90,287

 

 

 

 

 

 

 

 

69,894

 

 

 

 

 

 

Allowance for loan and lease losses

 

(36,339)

 

 

 

 

 

 

 

 

(35,969)

 

 

 

 

 

 

Total assets

$

5,504,686

 

 

 

 

 

 

 

$

4,669,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, savings and other interest-bearing accounts

$

2,314,791

 

$

3,348

 

0.58

%

 

$

2,058,611

 

$

2,907

 

0.57

%

Certificates of deposit

 

83,606

 

 

217

 

1.04

%

 

 

86,902

 

 

264

 

1.23

%

Total interest-bearing deposits

 

2,398,397

 

 

3,565

 

0.60

%

 

 

2,145,513

 

 

3171

 

0.60

%

Borrowed funds

 

45,296

 

 

512

 

4.47

%

 

 

45,282

 

 

513

 

4.53

%

Total interest-bearing liabilities

 

2,443,693

 

 

4,077

 

0.67

%

 

 

2,190,795

 

 

3,684

 

0.68

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

2,603,198

 

 

 

 

 

 

 

 

2,067,539

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

100,698

 

 

 

 

 

 

 

 

63,932

 

 

 

 

 

 

Total liabilities

 

5,147,589

 

 

 

 

 

 

 

 

4,322,266

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

357,097

 

 

 

 

 

 

 

 

346,785

 

 

 

 

 

 

Total liabilities and equity

$

5,504,686

 

 

 

 

 

 

 

$

4,669,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

36,973

 

 

 

 

 

 

 

$

34,422

 

 

 

Net interest rate spread (2)

 

 

 

 

 

 

2.31

%

 

 

 

 

 

 

 

2.64

%

Net interest-earning assets

$

3,007,045

 

 

 

 

 

 

 

$

2,444,331

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

 

2.68

%

 

 

 

 

 

 

 

3.00

%

Ratio of interest earning assets to interest bearing liabilities

 

 

 

 

 

 

2.23

x

 

 

 

 

 

 

 

2.12

x

Total cost of funds (4)

 

 

 

 

 

 

0.32

%

 

 

 

 

 

 

 

0.35

%

 


(1) Amount includes deferred loan fees and non-performing loans.

(2) Determined by subtracting the annualized weighted average cost of total interest-bearing liabilities from the annualized weighted average yield on total interest-earning assets.

(3) Determined by dividing annualized net interest income by total average interest-earning assets.

(4) Determined by dividing annualized interest expense by the sum of total average interest-bearing liabilities and total average non-interest-bearing deposits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

June 30, 2021

 

June 30, 2020

 

 

 

Average

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

Yield/Rate

 

Outstanding

 

 

 

 

Yield/Rate

 

(dollars in thousands)

 

Balance

 

Interest

 

(annualized)

 

Balance

 

Interest

 

(annualized)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

3,334,762

 

$

39,234

 

4.65

%

$

2,827,154

 

$

32,983

 

4.68

%

Available-for-sale securities

 

 

487,147

 

 

1,204

 

0.98

%

 

138,944

 

 

609

 

1.73

%

Held-to-maturity securities

 

 

2,348

 

 

9

 

1.52

%

 

3,423

 

 

16

 

1.85

%

Equity investments - non-trading

 

 

2,309

 

 

7

 

1.20

%

 

2,274

 

 

11

 

1.91

%

Overnight deposits

 

 

1,612,187

 

 

442

 

0.11

%

 

794,377

 

 

374

 

0.19

%

Other interest-earning assets

 

 

11,985

 

 

154

 

5.15

%

 

18,485

 

 

230

 

4.92

%

Total interest-earning assets

 

 

5,450,738

 

 

41,050

 

2.98

%

 

3,784,657

 

 

34,223

 

3.62

%

Non-interest-earning assets

 

 

90,287

 

 

 

 

 

 

 

59,014

 

 

 

 

 

 

Allowance for loan and lease losses

 

 

(36,339)

 

 

 

 

 

 

 

(31,446)

 

 

 

 

 

 

Total assets

 

$

5,504,686

 

 

 

 

 

 

$

3,812,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, savings and other interest-bearing accounts

 

$

2,314,791

 

$

3,348

 

0.58

%

$

1,764,742

 

$

2,437

 

0.56

%

Certificates of deposit

 

 

83,606

 

 

217

 

1.04

%

 

97,688

 

 

478

 

1.97

%

Total interest-bearing deposits

 

 

2,398,397

 

 

3,565

 

0.60

%

 

1,862,430

 

 

2,915

 

0.63

%

Borrowed funds

 

 

45,296

 

 

512

 

4.47

%

 

158,471

 

 

1,147

 

2.86

%

Total interest-bearing liabilities

 

 

2,443,693

 

 

4,077

 

0.67

%

 

2,020,901

 

 

4,062

 

0.81

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

2,603,198

 

 

 

 

 

 

 

1,398,438

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

100,698

 

 

 

 

 

 

 

78,159

 

 

 

 

 

 

Total liabilities

 

 

5,147,589

 

 

 

 

 

 

 

3,497,498

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

357,097

 

 

 

 

 

 

 

314,727

 

 

 

 

 

 

Total liabilities and equity

 

$

5,504,686

 

 

 

 

 

 

$

3,812,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

36,973

 

 

 

 

 

 

$

30,161

 

 

 

Net interest rate spread (2)

 

 

 

 

 

 

 

2.31

%

 

 

 

 

 

 

2.81

%

Net interest-earning assets

 

$

3,007,045

 

 

 

 

 

 

$

1,763,756

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

 

 

2.68

%

 

 

 

 

 

 

3.19

%

Ratio of interest earning assets to interest bearing liabilities

 

 

 

 

 

 

 

2.23

x

 

 

 

 

 

 

1.87

x

Total cost of funds (4)

 

 

 

 

 

 

 

0.32

%

 

 

 

 

 

 

0.48

%

 


(1) Amount includes deferred loan fees and non-performing loans.

(2) Determined by subtracting the annualized weighted average cost of total interest-bearing liabilities from the annualized weighted average yield on total interest-earning assets.

(3) Determined by dividing annualized net interest income by total average interest-earning assets.

(4) Determined by dividing annualized interest expense by the sum of total average interest-bearing liabilities and total average non-interest-bearing deposits.

Summary of Income and Performance Measures

Five Quarter Trend (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

(Dollars in thousands)

 

June 30, 2021

 

Mar. 31, 2021

 

Dec. 31, 2020

 

Sept. 30, 2020

 

June 30, 2020

 

Net interest income

 

$

36,973

 

$

34,422

 

$

33,467

 

$

32,324

 

$

30,161

 

Provision for loan losses

 

 

1,875

 

 

950

 

 

1,795

 

 

1,137

 

 

1,766

 

Net interest income after provision for loan losses

 

 

35,098

 

 

33,472

 

 

31,672

 

 

31,187

 

 

28,395

 

Non-interest income

 

 

6,156

 

 

4,595

 

 

3,373

 

 

3,637

 

 

5,653

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

11,211

 

 

11,428

 

 

9,835

 

 

9,944

 

 

10,058

 

Other expense

 

 

10,478

 

 

8,895

 

 

7,953

 

 

8,986

 

 

8,226

 

Total non-interest expense

 

 

21,689

 

 

20,323

 

 

17,788

 

 

18,930

 

 

18,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

 

19,565

 

 

17,744

 

 

17,257

 

 

15,894

 

 

15,764

 

Income tax expense

 

 

6,229

 

 

5,627

 

 

5,482

 

 

5,111

 

 

4,953

 

Net income

 

 

13,336

 

 

12,117

 

 

11,775

 

 

10,783

 

 

10,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income*

 

$

21,440

 

$

18,694

 

$

19,052

 

$

17,031

 

$

17,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

 

 

13,252

 

 

12,062

 

 

11,690

 

 

10,694

 

 

10,716

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings

 

$

1.59

 

$

1.46

 

$

1.42

 

$

1.30

 

$

1.30

 

Diluted earnings

 

$

1.55

 

$

1.43

 

$

1.39

 

$

1.27

 

$

1.29

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average - diluted

 

 

8,543,474

 

 

8,417,319

 

 

8,417,729

 

 

8,393,211

 

 

8,359,450

 

Period end

 

 

8,344,193

 

 

8,345,032

 

 

8,295,272

 

 

8,289,479

 

 

8,294,801

 

Return on (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

 

0.97

%

 

1.05

%

 

1.13

%

 

1.07

%

 

1.14

%

Average equity

 

 

14.98

%

 

14.17

%

 

13.94

%

 

13.20

%

 

13.82

%

Average tangible common equity*

 

 

15.65

%

 

14.82

%

 

14.61

%

 

13.85

%

 

14.36

%

Yield on average earning assets

 

 

2.98

%

 

3.32

%

 

3.54

%

 

3.54

%

 

3.62

%

Cost of interest-bearing liabilities

 

 

0.67

%

 

0.68

%

 

0.64

%

 

0.71

%

 

0.81

%

Net interest spread

 

 

2.31

%

 

2.64

%

 

2.90

%

 

2.83

%

 

2.81

%

Net interest margin

 

 

2.68

%

 

3.00

%

 

3.21

%

 

3.18

%

 

3.19

%

Net charge-offs as % of average loans (annualized)

 

 

%

 

0.11

%

 

%

 

%

 

0.03

%

Efficiency ratio

 

 

50.29

%

 

52.09

%

 

48.28

%

 

52.64

%

 

54.58

%

*Non-GAAP financial measure. See Reconciliation of Non-GAAP measures on page 12.

Consolidated Balance Sheet Summary, Five Quarter Trend (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

June 30, 2021

 

Mar. 31, 2021

 

Dec. 31, 2020

 

Sept. 30, 2020

 

June 30, 2020

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,787,193

 

$

4,922,801

 

$

4,330,821

 

$

4,001,759

 

$

3,970,441

 

Overnight deposits

 

 

1,689,614

 

 

1,125,589

 

 

855,613

 

 

758,913

 

 

813,147

 

Total securities

 

 

548,282

 

 

484,761

 

 

271,169

 

 

187,695

 

 

194,979

 

Other investments

 

 

11,989

 

 

11,638

 

 

11,597

 

 

11,097

 

 

15,731

 

Loans, net of deferred fees and unamortized costs

 

 

3,449,490

 

 

3,237,664

 

 

3,137,053

 

 

2,989,550

 

 

2,892,274

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

2,794,136

 

$

2,167,899

 

$

1,715,042

 

$

1,553,241

 

$

1,526,439

 

Interest-bearing deposits

 

 

2,494,137

 

 

2,258,818

 

 

2,103,471

 

 

1,974,385

 

 

1,868,300

 

Total deposits

 

 

5,288,273

 

 

4,426,717

 

 

3,814,513

 

 

3,527,626

 

 

3,334,739

 

Borrowings

 

 

45,304

 

 

45,290

 

 

45,277

 

 

45,263

 

 

149,249

 

Total stockholders' Equity

 

 

363,595

 

 

348,217

 

 

340,787

 

 

328,584

 

 

317,169

 

Loan Production

 

$

265.4

 

$

235.7

 

$

174.0

 

$

183.3

 

$

177.3

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3,337

 

 

3,337

 

 

4,192

 

 

4,512

 

 

6,482

 

Consumer

 

 

1,560

 

 

1,523

 

 

1,428

 

 

1,157

 

 

601

 

Total non-accrual loans

 

$

4,897

 

$

4,860

 

$

5,620

 

$

5,669

 

$

7,083

 

Total non-performing loans

 

$

5,491

 

$

5,464

 

$

6,389

 

$

6,623

 

$

8,448

 

Non-accrual loans to total loans

 

 

0.14

%

 

0.15

%

 

0.18

%

 

0.19

%

 

0.24

%

Non-performing loans to total loans

 

 

0.16

%

 

0.17

%

 

0.20

%

 

0.22

%

 

0.29

%

Allowance for loan losses

 

 

(37,377)

 

 

(35,502)

 

 

(35,407)

 

 

(33,614)

 

 

(32,505)

 

Allowance for loan losses to total loans

 

 

1.08

%

 

1.10

%

 

1.13

%

 

1.12

%

 

1.12

%

Charge-offs

 

$

 

$

(855)

 

$

(30)

 

$

(82)

 

$

(192)

 

Recoveries

 

$

 

$

 

$

28

 

$

54

 

$

7

 

Net charge-offs/(recoveries) as % of average loans (annualized)

 

 

%

 

0.11

 

 

%

 

%

 

0.03

%

Regulatory Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

6.8

%

 

7.8

%

 

8.5

%

 

8.4

%

 

8.6

%

Metropolitan Commercial Bank

 

 

7.3

%

 

8.2

%

 

9.0

%

 

9.0

%

 

9.2

%

Common Equity Tier 1 Risk-Based (CET1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

9.7

%

 

9.9

%

 

10.1

%

 

10.1

%

 

9.9

%

Metropolitan Commercial Bank

 

 

11.1

%

 

11.3

%

 

11.6

%

 

11.8

%

 

11.6

%

Tier 1 Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

10.5

%

 

10.7

%

 

10.9

%

 

11.0

%

 

10.8

%

Metropolitan Commercial Bank

 

 

11.1

%

 

11.3

%

 

11.6

%

 

11.8

%

 

11.6

%

Total Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

12.2

%

 

12.4

%

 

12.7

%

 

12.9

%

 

12.7

%

Metropolitan Commercial Bank

 

 

12.2

%

 

12.4

%

 

12.7

%

 

12.9

%

 

12.6

%

Reconciliation of Non-GAAP Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), this earnings release includes certain non-GAAP financial measures. Management believes these non-GAAP financial measures provide meaningful information to investors in understanding the Company’s operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP/adjusted financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Data

 

 

YTD

Dollars in thousands, except per share data

 

June 30, 2021

 

Mar. 31, 2021

 

Dec. 31, 2020

 

Sept. 30, 2020

 

June 30, 2020

 

June 30, 2021

 

 

June 30, 2020

Average assets

$

5,504,686

 

$

4,669,051

 

$

4,153,908

 

$

4,026,366

 

$

3,812,225

 

$

5,089,152

 

$

3,633,280

Less: average intangible assets

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

Average tangible assets

$

5,494,953

 

$

4,659,318

 

$

4,144,175

 

$

4,016,633

 

$

3,802,492

 

$

5,079,419

 

$

3,623,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average equity

$

357,097

 

$

346,785

 

$

335,940

 

$

324,876

 

$

314,727

 

$

351,945

 

$

310,607

Less: Average preferred equity

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

Average common equity

$

351,595

 

$

341,283

 

$

330,438

 

$

319,374

 

$

309,225

 

$

346,443

 

$

305,105

Less: average intangible assets

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

Average tangible common equity

$

341,862

 

$

331,550

 

$

320,705

 

$

309,641

 

$

299,492

 

$

336,710

 

$

295,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

5,787,193

 

$

4,922,801

 

$

4,330,821

 

$

4,001,759

 

$

3,970,441

 

$

5,787,193

 

$

3,970,441

Less: intangible assets

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

Tangible assets

$

5,777,460

 

$

4,913,068

 

$

4,321,088

 

$

3,992,026

 

$

3,960,708

 

$

5,777,460

 

$

3,960,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

$

363,595

 

$

348,217

 

$

340,787

 

$

328,584

 

$

317,169

 

$

363,595

 

$

317,169

Less: preferred equity

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

 

 

5,502

Common equity

$

358,093

 

$

342,715

 

$

335,285

 

$

323,082

 

$

311,667

 

$

358,093

 

$

311,667

Less: intangible assets

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

Tangible common equity (book value)

$

348,360

 

$

332,982

 

$

325,552

 

$

313,349

 

$

301,934

 

$

348,360

 

$

301,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

8,344,193

 

 

8,345,032

 

 

8,295,272

 

 

8,289,479

 

 

8,294,801

 

 

8,344,193

 

 

8,294,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share (GAAP)

$

42.92

 

$

41.07

 

$

40.42

 

$

38.97

 

$

37.57

 

$

42.92

 

$

37.57

Tangible book value per share (non-GAAP)*

$

41.75

 

$

39.90

 

$

39.25

 

$

37.80

 

$

36.40

 

$

41.75

 

$

36.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (GAAP)**

$

43,129

 

$

39,017

 

$

33,467

 

$

32,234

 

$

35,814

 

$

82,145

 

$

69,121

Gain on sale of securities

 

609

 

 

-

 

 

-

 

 

-

 

 

2,312

 

 

609

 

 

3,286

Revenue excluding gain on sale of

securities (non-GAAP)

$

42,520

 

$

39,017

 

$

33,467

 

$

32,234

 

$

33,502

 

$

81,536

 

$

65,835

 


* Tangible book value divided by common shares outstanding at period-end.

** Total revenue equals net interest income plus non-interest income.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Data

 

Dollars in thousands

June 30, 2021

 

Mar. 31, 2021

 

Dec. 31, 2020

 

Sept. 30, 2020

 

June 30, 2020

 

Net income

$

13,336

 

$

12,117

 

$

11,775

 

$

10,783

 

$

10,811

 

Plus: income tax expense

 

6,229

 

 

5,627

 

 

5,482

 

 

5,111

 

 

4,953

 

Income before income tax expense

$

19,565

 

$

17,744

 

$

17,257

 

$

15,894

 

$

15,764

 

Plus: provision for loan losses

 

1,875

 

 

950

 

 

1,795

 

 

1,137

 

 

1,766

 

Pre-tax, pre-provision income

$

21,440

 

$

18,694

 

$

19,052

 

$

17,031

 

$

17,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expense (GAAP)

$

21,689

 

$

20,323

 

$

17,788

 

$

18,930

 

$

18,284

 

Total Revenue (GAAP)

$

43,129

 

$

39,017

 

$

36,840

 

$

35,961

 

$

35,814

 

Efficiency ratio (non-GAAP)

 

50.3

%

 

52.1

%

 

48.3

%

 

52.6

%

 

51.1

%

 

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